A modern Falkland Islands, transformed by war

Nick Pitaluga, left, and his wife Annie work on their sheep farm in Salvador, Falkland Islands, Thursday March 8, 2012. The sheep farm has been in Pitaluga's family since it was started by his great-great grandfather Andrez Pitaluga, one of the earliest arrivals to the islands after Britain took control in 1833. (AP Photo/Michael Warren)

STANLEY, Falkland Islands (AP) — Falkland Islanders are still bristling over the invasion by Argentina 30 years ago, but they're not complaining about its aftermath.

The April 2, 1982, invasion led by Argentina's dictators and the subsequent war with Britain launched a process that transformed the archipelago from a sleepy backwater of sheep farms into a prosperous outpost whose residents enjoy one of the highest per capita incomes in the Western Hemisphere.

"It took a war to make it better," said Sybie Summers, who runs a gift shop in Stanley. "Life really changed. When we were kids we played with sheep bones. Now it's a new iPad they have to have."

The key to jump-starting their economy, islanders say, was the British military muscle left in place after the invasion. The presence of 8,000 troops and a military fleet gave the Falklands the power to establish a fisheries licensing program, and collect fees off of the hundreds of rogue trawlers from Asia and Spain that had been overfishing the South Atlantic.

That fisheries revenue then paid for free educations in Britain for every Falklands teenager. About 80 percent of those kids have returned debt-free with university degrees and advanced skills.

Most islanders still have to work multiple jobs to provide all the necessary services among a population of just 3,000. But last year's government surplus was nearly 19 million pounds (US$29.9 million), and the rainy-day fund now provides a nearly 3-year cushion against economic crisis.

The revenue from the fishing industry also seeded offshore oil exploration, which paid off last year with the Sea Lion discovery, an oil strike some analysts estimate could deliver $3.9 billion in taxes and royalties in the years ahead.

Oil exploration is already generating more in revenues than the islands' government has ever seen.

And if Rockhopper Exploration finds a $2 billion partner to fund crude production, "quite simply they'll become the richest people in the world" said John Foster, a managing director of the Falkland Islands Company, which runs an array of local businesses.

If not for Argentina's 74-day occupation, islanders say, the Falklands might still be stuck in reverse — a lonely and declining outpost with few job opportunities or creature comforts.

"This is a totally different situation here than there was 30 years ago," said Nick Pitaluga, a fifth-generation islander.

In London, many still believe islanders are subsidized by British taxpayers, when in fact the Falkland Islands Government runs a surplus and counts on Britain for only defense and foreign affairs.

The official view from Buenos Aires is that British forces usurped control of the islands from her country 179 years ago and hold them today as a colonial enclave.

"It is an anachronism in the 21st century to continue maintaining colonies," Argentine President Cristina Fernandez said recently.

In the islands, though, it is hard to find anyone who would like to see the Argentine flag flying above Stanley, and while Argentines are welcome for a visit, signs of allegiance to their homeland are not.

Jan Cheek, a legislative assembly member whose great-great-great-grandfather arrived here from England in 1842, favors maintaining the islands' tight immigration controls that require a seven-year residency to apply for islander status, which if accepted brings eligibility to vote. No more than 40 people may qualify each year

"Theoretically, 4,000 Argentines could come in and vote to become part of Argentina," Cheek said. "Our whole way of life could be swamped and changed by a massive influx over a short period."

Though the islands' population is a mix of some 30 nationalities, from British to Chilean to Russian to a handful of Argentines, the language is English and the culture decidedly British.

After the war the Falklands became a self-determining British Overseas Territory. In 1983, Britain granted full citizenship to Falkland Islanders and under the 1985 constitution the islands became effectively self-governing with the exception of foreign policy.

The local government encouraged the Falklands Islands Company to break up its sheep farms and diversify its holdings. It did, and has since brought more investments and a higher quality of life back to the islands.

The remote South Atlantic archipelago 300 miles (480 km) off Argentina's extreme southern coast seemed to have few prospects before the conflict, which cost the lives of 900 soldiers and sailors, most of them Argentine. The price of wool from the islands' half-million sheep had plunged; the population dropped below 1,800; and there was almost no infrastructure for a modern economy.

Beyond the several dozen streets of the tiny capital, there were no roads at all and only a rudimentary radio telephone system to communicate across a territory nearly the size of Wales.

Before the war, Britain was shedding vestiges of its colonial empire, and sent officials down urging islanders to accept a Hong Kong-style handover. Three Argentine air force officers were sitting in the front row as a British diplomat told the islanders not to expect military protection, recalled John Fowler, a longtime editor at the islands' weekly Penguin News.

When Argentine bombs started exploding around Stanley, many islanders wondered if London, some 8,000 miles (12,874 kilometers) away, cared for them at all.

"It seemed to us that we were an embarrassment to the United Kingdom's ambitions of reasserting themselves as an economic power in Latin America," recalled Fowler.

When the British soldiers did arrive, it seemed like a miracle to islanders who felt they were being controlled by Argentina even before the invasion.

"They had their chance back then and blew it. If they had waited a few more months, (British Prime Minister) Maggie Thatcher probably would have handed us over, but they couldn't wait and Thatcher got her knickers in a twist. We were very very lucky she had that kind of backbone," said Pitaluga, who still raises sheep on the land his great-great grandfather settled after arriving in 1840.